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Search forCouncil promises to pay up quicker to help small firms
Wednesday, December 03, 2008, 09:30
As the economic downturn deepens, council leaders want to give a seasonal boost to the 600 small firms which supply the authority on a regular basis.
Experts believe businesses with healthy cash flow will be best equipped to survive the tough times ahead, and the council wants to safeguard jobs by paying invoices within 10 days rather than the normal 30 days.
Councillor Kieran Clarke, portfolio holder for resources, said: "It's vitally important that we help to support small businesses at this time of year.
"With the financial climate as it is, and especially with Christmas approaching, we have a commitment to help them as much as we can.
"By reducing the amount of time that people have to wait to receive payment from the city council, we are trying to make sure everyone is able to get through such a difficult time with a minimum impact on their finances."
Officials will be instructed to deal with the purchase of all goods and services from small businesses through the authority's electronic ordering system.
The council claims the new system enables payments to be prepared within three days of receiving an invoice.
All city council services, including schools, museums and libraries, as well as internal staff, will be monitored to make sure they stick to the new deadlines.
Fenton-based Cropper Grounds Maintenance supplies grounds-tending services at schools across the city, as well as playground marking services and gritting.
Director Tim Dawson said: "This will definitely help with cash flow.
"When a business is growing as quick as ours, you take people on before new contracts start and then it may be two months before you are actually start getting paid for the job.
"Anything that helps with cash flow in this climate is really welcome."
The city council's move follows a similar scheme introduced by Newcastle Borough Council at the start of November.
Bryan Carnes, chief executive of the North Staffordshire Chamber of Commerce and Industry, said: "It's good to see that the city council is following the good practice brought in by the Government and other local authorities.
"At this difficult time the most important thing to business is cash flow and getting money on time.
"That allows employers to meet their obligations to their employees, to Customs and Excise and, most importantly, to their own suppliers.
"Anything which helps employers get cash in to keep them liquid is a great help."
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